The CITB levy is an annual charge on UK construction employers, collected by the Construction Industry Training Board under the Industrial Training Act 1982 to fund apprenticeships, qualifications, and skills training across the sector. If more than half of your workforce’s time is spent on construction activities, you must register, file a Levy Return each year, and pay based on your wage bill. Smaller employers get full or partial relief, and employers who file on time can claim grants back against training costs.
Who Has to Register
Registration is compulsory for any employer whose workforce spends more than half its time on construction activities. CITB calls this the “wholly or mainly” test, and it looks at the actual work performed across your entire staff, including subcontractors, not at how you describe your business.1CITB. CITB Levy – Should You Register
That catches firms that don’t think of themselves as construction businesses. A company that manufactures kitchen units in a workshop wouldn’t normally qualify; one that primarily installs them on site would. The activities in scope are set out in Schedule 1 of the Industrial Training (Construction Board) Order 1964 (Amendment) Order 1992 and cover general building and civil engineering, specialist trades such as bricklaying, plastering, roofing and scaffolding, installation work including fitted kitchens, shop fitting and suspended ceilings, groundworks and piling, and ancillary services such as plant hire, asbestos removal, and joinery manufacture.1CITB. CITB Levy – Should You Register
Some work sits on the boundary. Structural carpentry on a building site counts; furniture-making in a workshop does not. Hard landscaping such as retaining walls and driveways falls in scope, but general garden maintenance stays out.
How the Levy Is Calculated
Two rates apply, depending on how workers are paid. The PAYE rate is 0.35% of total gross taxable payments to your employees and paid directors. The CIS rate is 1.25% of total payments made to net-paid CIS subcontractors, meaning those from whom you deduct tax at source. Both rates apply for the 2025 and 2026 levy years.2Construction Industry Training Board. CITB Levy Rates – What You Pay and Why
Subcontractors who hold gross payment status under CIS are excluded entirely. They receive their full payment without tax deducted and the board doesn’t count them.2Construction Industry Training Board. CITB Levy Rates – What You Pay and Why
What Goes Into the PAYE Total
Box A on the Levy Return asks for total gross taxable payments to all employees and paid directors before deductions. It includes wages for PAYE staff, paid directors, administrative employees, IR35 off-payroll workers deemed employed for tax purposes, and anyone who left during the year.3CITB. How to Fill in Your CITB Levy Return
Several payment types must be excluded from Box A:
- Employer pension contributions
- Employer’s National Insurance contributions
- Dividends
- Sole trader and partner drawings
- Payments to subcontractors, agency staff, or labour agencies
Mistakes cluster here. Including pension contributions or dividends inflates the wage bill and produces an overpayment, because the whole assessment runs off the figures you enter.3CITB. How to Fill in Your CITB Levy Return
Payments to agency staff and labour agencies stay out of the PAYE total. The 2026 return added Section 3b, which asks for those figures separately in Boxes G and H, but that data is collected for research only and doesn’t affect what you owe.3CITB. How to Fill in Your CITB Levy Return
Small Business Exemption and Reduction
The thresholds work off your combined wage bill: PAYE payments plus net CIS subcontractor payments added together.2Construction Industry Training Board. CITB Levy Rates – What You Pay and Why
- Under £150,000: full exemption under the Small Business Levy Exemption. You still register and file a return, but you pay nothing.
- £150,000 to £499,999: 50% discount under the Small Business Levy Reduction.
- £500,000 and above: the full levy at the standard rates, with no discount.
Filing Your Levy Return
The return covers the previous tax year. You’ll need your payroll summaries showing total gross taxable payments and your CIS records, including your CIS300 or online contractor monthly returns, to confirm tax deducted from each subcontractor.3CITB. How to Fill in Your CITB Levy Return
Submission is through the CITB online portal, and paper forms are also accepted. Check the CITB website or your own correspondence for the exact deadline in a given year. Once your return is processed, the board issues a Levy Assessment Notice showing the total owed and how it was worked out.
How to Pay
You have two options once the assessment arrives:2Construction Industry Training Board. CITB Levy Rates – What You Pay and Why
- Lump sum: pay in full within one month of receiving the assessment.
- Direct Debit: spread the cost over up to 10 interest-free monthly instalments.
The Direct Debit option is only open to employers who submitted an actual Levy Return. If you received an estimated assessment because you didn’t file, you have to clear that estimate in full before instalments become available. The Direct Debit mandate is attached to the assessment notice or can be downloaded from the CITB website.
What Happens If You Don’t File
If a return doesn’t arrive, the board issues an estimated assessment based on industry data, and those estimates typically produce a higher bill than an accurate return. An estimated assessment also blocks you from grant funding and from the instalment option until you file properly.
The enforcement powers sit in the Industrial Training Act 1982. Section 11 gives the board authority to propose levies, which the Secretary of State implements through a Levy Order.4Legislation.gov.uk. Industrial Training Act 1982 – Section 11 Section 6 empowers the board to require employers to furnish returns and keep records. Failing to comply is a criminal offence carrying a fine. Providing false information is treated more seriously and can result in imprisonment of up to two years or an unlimited fine on indictment.5Legislation.gov.uk. Industrial Training Act 1982 The levy itself is recoverable as a debt under Section 12, so unpaid amounts can be pursued through the courts.
Grants You Can Claim Back
Registered employers who file on time can claim grants against training costs. The scheme covers apprenticeships, qualifications, and specialist courses including plant operations and scaffolding, with a £600 achievement grant when a worker completes a long qualification.
Short-duration training moved to a different footing in January 2026. It’s now funded through Employer Networks rather than the general Grants Scheme: employers work with a local CITB Adviser to identify training needs, and CITB match-funds 50% of eligible courses. Health and safety courses are funded at 30% of the average market rate. Large employers with 250 or more workers have separate arrangements, and a dedicated large employer fund launched in April 2026.
Filing late or receiving an estimated assessment doesn’t just mean a bigger bill. It cuts you off from the grants that make the levy worthwhile in the first place, and most employers who engage with the system properly recover a meaningful share of what they pay in.